A couple of years ago I had a great plan for my future. I was going to sell my house, pay off all of my debt, and purchase a very small condo with just enough room for the essentials of life. What ended up happening was one of the worst mistakes of my adult life.
First, instead of calling the realtor I knew was the best in the area, I contacted another realtor who was a friend. I thought that selling my home would not be difficult based on it’s location and price point and that she could certainly use the commission.
My back yard lawn had died the previous summer and she insisted I replace it with sod in order to make the property saleable (read, spend dollars$$$$). I also needed to replace the flooring in the back bedroom where I had pulled up the carpet the year before (more $$$).
After months of the daily struggle to keep the house viewing ready, after very little traffic and on the same day I was going to call and fire her, we received an offer on the house. It was a bit lower than what I originally wanted but I worked the numbers and decided to accept. The buyers had a funding pre-approval letter from a mortgage brokerage firm that has a good reputation.
I began to prepare for closing by selling and giving away all my possessions that were not essential. This included furniture (beds from the extra rooms, my mother’s dining room table, book shelves), lawn furniture, tools (saws, ladder, lawn mower), the freezer from the garage, etc. I pared down my possessions until I had just enough to fill a one bedroom apartment.
Next, I went in search of an apartment with a short-term lease to move into while looking for the perfect condo to purchase. The rental costs in the area surprised me, apparently driven higher than one would expect from a town this size by the local university housing shortage. After exploring what the area had to offer and trying to stay within my budget I put a deposit down on an apartment and began to plan my move.
I hired local movers, set a date to turn my utilities off at the old house and on at the apartment, changed my mailing address, and all the other things one does when planning a household move.
Then, the closing date was pushed back by the buyers, not by a few days, but by weeks. Their funding was taking longer than anticipated. Understandable, I suppose, but it caused me to have to let the apartment go rather than pay rent on two places and my initial deposit of $500 was not refundable. This was becoming a costlier move than anticipated.
I set about undoing all my moving prep and began my apartment search anew. I found another apartment, available for move in a month later than the first one, and placed a deposit down again. Meanwhile, I began packing for the intended move.
Three days before our closing date I had no word from my realtor about setting a specific time and place so I contacted her to get the information. I was told again that the buyers still had not received funding. Now, I was getting angry, and I didn’t understand how this could be the case. In the past I’d received a closing date within days of the loan going to the underwriter. So I contacted another friend, a mortgage broker who just happened to work where the buyers had received a pre-approval letter, and asked her what might be holding up the funding. She couldn’t tell me anything confidential, of course, but what she could tell me was that they had denied my buyers funding three days after they had put an offer on my house. The moment they got past the pre-approval into real due diligence they hit an insurmountable road block.
I called my real estate agent and asked if she had known this. Her response: “Oh, yeah, did I forget to tell you that?” She then begged me to hang in there with her and even had the buyers current mortgage broker call and beg me not to walk away from the deal, given me extensive details about the couple’s autistic children and how badly they needed my house. Against my better judgement, I waited again. At one point my realtor actually suggested I put all of my things in storage and go live with my sister until the deal finalized.
I’m sure by now you know what happened. The buyers never received funding, the deal fell through, and I was now sitting in a packed up three bedroom home with very little furniture, not much on the walls and none of the tools necessary for upkeep. I was out several thousand dollars, including another apartment deposit and repairs to the home requested by the buyer. I also lost a friend.
Because my realtor never informed me that the buyers had failed to get funded initially, I was denied the opportunity to walk away from the deal at that time or to include an addendum that if they failed to receive funding I would be able to keep their earnest money. Because of my realtor’s incompetence, I lost thousands of dollars with no recourse to be reimbursed.
If you use a realtor to buy or sell a home ensure that you choose wisely. Ask for referrals and call for references. A good realtor should keep you informed daily about traffic on their website and within your market area. They should always have your interests in the forefront, not their own or that of the other party. If you do not feel you are getting the service you are going to pay a very high price for at closing…do not hesitate to cancel the contract and move forward with someone else. Your home is your biggest asset; protect it as vigorously as possible.